Amazon turns to toys, home goods in latest brick-and-mortar trial

null | 27 Sep 2018 3:49 PM GMT

Highlights

Amazoncom Inc on Wednesday said it is opening a general store in New York City that will sell toys, household goods and a range of other products highly rated on its website, marking its latest push into brickandmortar retail

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Amazon.com Inc on Wednesday said it is opening a general store in New York City that will sell toys, household goods and a range of other products highly rated on its website, marking its latest push into brick-and-mortar retail.

Drawing on its wealth of customer data, Amazon has stocked the store with its best sellers as well as products popular with New Yorkers. The shop, known as Amazon 4-star, will let customers play with Echo speakers, Kindle e-readers and other devices made by the company. It will also sell books, games and kitchenware.

The news marks Amazon’s latest incursion into the turf of rivals such as Target Corp, which has courted urban shoppers with new small-format stores. It also highlights how the world’s largest online retailer, famous for upending retail chains’ business, is increasingly turning to physical stores to please customers.

Digital price tags will line the shelves of Amazon 4-star. That will allow items’ prices to fluctuate, so members of Amazon’s loyalty club Prime will always pay the online price in the store.

Those without membership in the fast-shipping club will be charged the typically higher list price, unless they sign up for Prime on the spot. Amazon’s chain of more than a dozen book stores operates in the same way.

Encouraging sign-ups is key to the company’s strategy because Prime members tend to shop more on Amazon.com.

The extent of Amazon’s ambition for the new store format is unclear. The company is known for experimentation, and a spokesman declined to comment on expansion plans.

Michael Pachter, an analyst at Wedbush Securities, said Amazon will add new stores if the format takes off, but he expects it may not.

“If I’m looking for a television and the store is full of kitchen appliances, it doesn’t help me very much,” he said.

Grocery remains the other key category for Amazon’s brick-and-mortar play.

The company bought Whole Foods Market in a $13.7 billion deal last year, from which it is now delivering fresh food to shoppers’ homes. It is also rolling out smaller grocery shops known as Amazon Go, where in-store technology allows customers to walk out with items and have their credit cards billed without having to stop by a cash register.